TAXATION

Certification of Taxpayer Identification Numbers (TINs) by a Non-Account Owner

April 2003

By Susan N. LeDuc, CRCM and
Donald R. Saxon, Esq.*

Q: What is the legal basis for allowing an escrow agent, landlord, attorney, or other party to certify an individual account holder’s Taxpayer Identification Number (TIN) at account opening?

A: The Internal Revenue Service allows only the following persons to certify a TIN:

• An individual may certify his/her own TIN;
   
• An attorney-in-fact may certify his/her principal’s (i.e., the bank customer’s) TIN if duly authorized by a written Power of Attorney from the principal to sign a W-9 form (unless the bank knows or has reason to know that the attorney-in-fact does not have authority to sign the Form W-9); and
   
• A Trustee of a trust can certify the trust’s TIN (a grantor trust may use an individual’s TIN).

A written and notarized limited special power of attorney could also be used by an individual to authorize another entity (i.e., an escrow agent, a landlord, or another entity) to certify his/her TIN for the opening of a deposit or other account.

Summary

A bank should only allow a person to certify another person’s TIN upon presentation of an original, written, notarized limited special power of attorney for that particular purpose. Otherwise, the bank runs the risk that the certification of the TIN is not valid, and that back-up withholding should apply to interest earned on the account.

A bank can offer such a fill-in-the-blank form as a standard document to be completed in situations where someone other than the proposed account owner intends to open an interest-bearing deposit account. To have the form properly notarized helps to ensure that the owner actually executed the power of attorney form and intends to open the account.

*Donald R. Saxon is admitted in New Hampshire, California, and Nevada

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